Tax Rate Cut Below a Buck

Tax Rate Cut Below a Buck

Council adopts budget; passes on open space funding for now.

It was unanimous and quick as the Alexandria City Council ended more than six weeks of deliberation by passing a $432.9 million operating budget for fiscal year 2005, and a six-year capital improvement program of $302.6 million.

The budget included a four-cent reduction in the city's real estate tax rate.

"I am very pleased that we could give property owners in Alexandria some tax relief," said Councilwoman Joyce Woodson. "As we looked at a map of where the largest increases in assessments occurred, we found that those areas which saw, in some instances a 50 percent increase in assessed value, also contained some of the city's poorest people. I am pleased at what we have done here."

The reduction takes the rate from $1.03.5 to 99.5 cents.

"This is the first time in 54 years that our tax rate has been below a dollar," said Mayor William D. Euille, who celebrated his birthday on the same day as budget adoption, May 3.

"We wanted to do something to give our citizens some tax relief and we have been able to do that."

Open space, which was another hotly debated item, was not specifically funded in the budget except for the one cent of real estate tax that remains dedicated to funding it through the open space trust fund.

"We all agree that open space is important," said Councilman Rob Krupicka. "Whether it is at $10 million or some other number, I think we are all saying that we are going to look for ways to purchase open space."

Four members of Council had proposed selling bonds to pay for open space — Krupicka and Councilman Paul Smedberg asked for $10 million in bonds; Councilman Ludwig Gaines asked for $15 million and Councilman Andrew Macdonald asked for $25 million. Just before the Council budget adoption meeting, citizens called for a rally in support of open space. [see related photograph.]

"We do plan to sell bonds in some amount of $10 million or more when we go to the bond market again in early 2005," Euille said. "We will decide just what that amount will be in the fall of 2004 after we have received an open space plan from the Open Space Task Force which lays out priorities."

Vice Mayor Redella S. "Del" Pepper, who read the complicated budget motion into the record, expressed her pleasure at giving senior citizens and persons with disabilities some relief. The budget contained a total of $2 million for expanded tax relief, an increase of $500,000 over the amount budgeted for FY2004. This program provides full, 50 percent or 25 percent exemption from real estate taxes provided the income level of the household is below certain levels. There is also money to bring senior taxi subsidies into line with those available for persons with disabilities.

"I am so pleased that we were able to provide so much relief in different ways for our seniors and those with disabilities," Pepper said.

AFFORDABLE HOUSING was not forgotten. The budget includes $745,000 for grants of up to $250 per household for homeowners who have no more than $61,000 in household income and homes worth no more than $362,000. For those who need to apply for these grants, the effective increase in their real estate taxes will be held to no more than 4.5 percent.

"Last year I wanted to do something to help just these people," Woodson said. "This year the staff came up with a program that is much better than anything I could have contemplated. I am very pleased that we are taking our commitment to providing affordable housing to those who already own homes in the city but who face the prospect of not being able to afford to live in them anymore."

Council provided funding for a Director of Pedestrian and Bike Trails and extra money for pedestrian safety. "These are very important programs," said Smedberg. "We are committed to maintaining the trails that we have and even expanding them."

Money is also available for upgrading the city's athletic fields and providing lighting for some of them. "We even have money for Rich Baier's trash cans," Pepper said. Both the mayor and Baier have talked about the need to upgrade the city's aging street trash receptacles for the past several years.

The Arlandria-based Tenants and Workers Support Committee will receive a loan from the city in the amount of $300,000. "I am pleased to see us helping a community to have its own community center," Macdonald said. "Perhaps we need to look at a process here, but this is a good thing."

The Burke Branch of the library will also receive money for books. "We need to put more books on the shelves for all of the children and adults who use this facility," Gaines said.

Council approved $350,000 in funding for next year to begin the process of looking at how city departments conduct business. "It's an opportunity not just to look at the efficiency of these departments but to set benchmarks," Krupicka said. The process of audit and benchmarks is expected to take the next two to three years to complete.

THE SCHOOL BUDGET was fully funded with $2 million left in contingent reserve until the state budget is a certainty. Localities are waiting to hear how the sales tax increase that has been designated for schools and local tax relief will be divided.

"We have fully funded the school system's operating and capital budget and will ensure that they do not suffer from state budget decisions," Euille said.

City and school employees will receive a two percent cost of living adjustment and funding is available to pay for merit step increases for those who are eligible.

"It is important to reward our staff," Pepper said. "They are truly a professional work force and we want to keep them."

On the revenue side, sewer fees are going up by 20 cents per thousand gallons of water usage and by 20 cents for solid waste disposal. These increases will fund new sanitary sewer capital improvements and operating expenses. The total increase per year for the average homeowner will be $16.

"I am glad that we are paying for these improvements in this way," Macdonald said. "Perhaps we can do even more next year."